BREAKING: Supreme Court Upholds 'Obamacare'

The Supreme Court has ruled 5-4 that the Affordable Care Act meets constitutional muster and can be allowed to continue its slow process of transforming the nation's health care system.

Thursday's historic decision, authored by Chief Justice Roberts, was by no means a fait accompli. Though the consensus among constitutional scholars has always been that the law's insurance mandate did not exceed Congress' Commerce Clause powers, its opponents erected a counterargument that quickly became an article of faith on the right. In the end, Roberts' decision upheld the mandate as an exercise of Congress' taxing power.

The outcome has been a point of tense speculation, hope and anxiety both in Washington and around the country from the moment President Obama signed health care reform into law.

Complicating matters for the law's supporters, the administration's top legal advocate, Solicitor General Donald Verrilli, choked in oral arguments before the Supreme Court -- out-litigated by the GOP's star attorney Paul Clement.

And in the days leading up to the decision, a peculiar conventional wisdom took hold -- in the media, and among political and judicial veterans -- that the mandate, and possibly other key provisions, or the whole statute, would fall.

But during oral arguments, Roberts tipped his hand, and provided the Court a glimpse at his ultimate reasoning. By siding with the Court's liberal wing, he may have saved the entire law. In the dissenting opinion, Justice Anthony Kennedy, writing on behalf of Justices Samuel Alito, Clarence Thomas, and Antonin Scalia, held that "in our view, the entire Act before us is invalid in its entirety."

From the moment the law was enacted, most Court watchers expected that the ACA's fate would hinge on the Court's interpretation of Congress' Commerce Clause powers. Conservatives contended that, by ultimately requiring people to enter a market, the health care law would compel idle uninsured people into activity -- an arguably novel use of the Commerce Clause and one the challengers claimed exceeded constitutional limits. In the end, the five conservative justices, including Roberts, agreed with this argument. Only Justice Ruth Bader Ginsburg among all nine justices explicitly argued otherwise.

"The Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions," Roberts wrote. "Any police power to regulate individuals as such, as opposed to their activities, remains vested in the States."

But Roberts nonetheless determined that, by allowing consumers to choose between purchasing insurance and paying a penalty, the mandate should be allowed to stand as an exercise of Congress' taxing power.

"[I]t is estimated that four million people each year will choose to pay the IRS rather than buy insurance. We would expect Congress to be troubled by that prospect if such conduct were unlawful," Roberts wrote in his controlling opinion. "That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance."

Roberts went on: "Congress's use of the Taxing Clause to encourage buying something is, by contrast, not new. Tax incentives already promote, for example, purchasing homes and professional educations. ... The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

The ruling ends a Quixotic conservative quest to vanquish Obama's signature achievement by fiat. It also devastates the GOP's long-standing appeal to voters that the law exists as a monument to liberal overreach, in defiance of accepted limits on federal power. That Roberts, a conservative emissary to the Court, voted to uphold is particularly devastating.

Implementation of the ACA will thus continue apace and in full; free from the uncertainty that would have attended a decision to strike the mandate, and with its guarantee that nearly all Americans will be able to purchase insurance affordably in tact.

However, the Court did circumscribe the ACA's Medicaid expansion. The law hikes the eligibility threshold of that program to 133 percent of the poverty line, and covers nearly the entire cost of that expansion with federal dollars. As a matching program, states have typically been required to either accept all the government's requirements or risk losing all federal funding for Medicaid. Thursday's ruling holds that if states decline to expand Medicaid, they will only lose the expanded funds provided for in the ACA -- not funds for the program as it exists today.

Thursday's development also strips a huge source of uncertainty that has loomed over this election season. An adverse decision, in which part or all of President Obama's signature legislative achievement had been voided, would have been a political earthquake and shaken the 2012 race in unpredictable ways.

The Court, "reaffirmed a fundamental principle that here in America, in the wealthiest nation on earth, no illness or accident should lead to any family's financial ruin," Obama said in response to the ruling. "I know that there will be a lot of discussion today about the politics of all of this, about who won and who lost.... [B]ut that discussion completely misses the point. Whatever the politics, today's decision was a victory for people all over this country whose lives are more secure because of this law and the Supreme Court's decision to uphold it."

However it also refuels the Republicans' legislative attack on 'Obamacare,' which remains unpopular and will factor into the party's election year strategy.

"What the Court did not do on its last day in session, I will do on my first day if elected President of the United States," said GOP presidential nominee Mitt Romney. "And that is I will act to repeal Obamacare."

In the lead up to November, GOP leaders are expected to hold yet more votes to strip key pieces of the law, and, indeed, to repeal it altogether.

"Republicans won't let up whatsoever in our determination to repeal this terrible law," said said Senate Minority Leader Mitch McConnell in response to the Court's decision. "Now that the Court has ruled, it's time to focus on the primary reason this law should be fully repealed."

About The Author

Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com